Form: 8-K

Current report filing

August 13, 2015

[htbx_ex99z1002.gif]


EXHIBIT 99.1


Heat Biologics Announces Financial Results for the Second Quarter Ended June 30, 2015


DURHAM, N.C., August 13, 2015 – Heat Biologics, Inc.  (NASDAQ: HTBX), a clinical stage biopharmaceutical company focused on the development of cancer immunotherapies, today announced its financial results for the second quarter ended June 30, 2015.


Second Quarter 2015 Highlights & Recent Developments

·

Announced the development of ComPACT, a next-generation combination immunotherapy platform

o

Combines two important immunotherapy pathways, checkpoint inhibition and T-cell costimulation, in a single construct

o

First IND with the ComPACT platform is expected in 2H 2016

·

Presented interim immune response data from ongoing Phase 2 trial with HS-110 in advanced non-small-cell lung cancer at the 2015 American Society of Clinical Oncology (ASCO) annual meeting

·

Announced new Phase 1b trial of HS-110 in non-small cell lung cancer in combination with other immunotherapeutic agents

o

Trial will explore combination of HS-110 with various immune modulators.

·

Provided an update on immune responder and non-responder phenotypes from the Phase 1 clinical trial of HS-410 in non-muscle invasive bladder cancer at the American Association for Cancer Research (AACR) annual meeting

·

Announced key management promotions

o

Taylor Schreiber, M.D., Ph.D. to Chief Scientific Officer, responsible for leading the Companys research efforts including its ImPACT and ComPACT Therapy drug development platforms

o

Melissa Price, Ph.D., to Vice President of Product Development, responsible for directing the Company’s clinical development, regulatory and manufacturing strategy


“We continued to make advances and generate new data from our novel immunotherapy programs this quarter. Of particular note, we unveiled ComPACT, a next generation combination immunotherapy platform that holds the promise of delivering T-Cell priming and co-stimulatory molecules in a single biological product,” said Jeff Wolf, Heat’s CEO.  “We also announced a new Phase 1b trial of HS-110 in non-small cell lung cancer which will explore the combination of HS-110 with various immune modulators.”


“We expect a number of important value creating milestones in the second half of 2015,” continued Mr. Wolf.  “For HS-410, our immunotherapy candidate for non-muscle-invasive bladder cancer, we plan to release one-year safety and immune response data from our Phase 1 trial and complete enrollment in our Phase 2 trial.  Our accomplishments this quarter and throughout the year position us well to achieve our goals in the second half of 2015 and beyond.”







Quarter Ended June 30, 2015 vs. Quarter Ended June 30, 2014

Research and development expenses for the second quarter of 2015 decreased 31% to $0.6 million, compared to the $0.8 million in the second quarter of 2014.  The decrease is attributable to a decrease in pre-manufacturing costs associated with preparing to produce vaccines for use in our clinical trials, offset by increases in lab supplies and other fees.


Clinical and regulatory expenses increased to $3.4 million, compared to $1.1 million for the second quarter of 2014. The increase was attributable to increases in clinical trial execution costs, increases in investigator payments, as well as an increase in costs related to the production of vaccines for our clinical trials.


General and administrative expenses for the quarter were $0.9 million, compared to $1.0 million for the second quarter of 2014. The decrease is attributable to a decrease in personnel expense, a decrease in facility expense due to allocation to other departments, and a decrease in travel expenses.


Net loss attributable to Heat Biologics, Inc. in the second quarter was $4.7 million, or ($0.56) per basic and diluted share.  This compares to a net loss of $2.8 million, or ($0.44) per basic and diluted share in the second quarter of 2014.  


As of June 30, 2015, the Company had cash, cash equivalents, and short-term investments of approximately $19.3 million.  This compares to cash, cash equivalents, and short-term investments of approximately $14.4 million at December 31, 2014.


Six Months Ended June 30, 2015 vs. Six Months Ended June 30, 2014

Research and development expenses for the six months ended June 30, 2015 (2015 Period) decreased to $1.1 million, compared to $1.4 million for the six months ended June 30, 2014 (2014 Period).  The decrease from the 2014 Period to the 2015 Period is attributable to a decrease in pre-manufacturing costs associated with preparing to produce vaccines for use in our clinical trials, as well as decreases in patent, license and other professional fees, offset by increases in compensation costs associated with new hires, lab supplies and other costs, and depreciation related to the build out of the lab facility and other associated costs.  


Clinical and regulatory expenses increased to $5.5 million, from $2.0 million in the first six months of 2014. The increase year over year is attributable to increases in clinical trial execution costs, increased investigator payments, as well as an increase in costs related to the production of vaccines for our clinical trials. Additionally, personnel cost, including consultants, professional fees, facilities costs, travel, and license fees increased.


General and administrative costs increased to $2.2 million, from $2.0 million in the comparable period in 2014.  The increase is attributable to increase in pay to certain key employees, an increase in professional services such as accountants, attorneys and investor relations, and travel. These increases are offset by a decrease in facility and related costs as well as a decrease in depreciation.







About Heat Biologics, Inc.

Heat Biologics, Inc. (www.heatbio.com) is a clinical-stage biopharmaceutical company focused on developing its novel, "off-the-shelf" ImPACT™ and ComPACT therapeutic vaccines to combat a wide range of cancers. Our therapies are designed to deliver live, genetically-modified, irradiated human cells which are reprogrammed to "pump out" a broad spectrum of cancer-associated antigens, together with a potent immune adjuvant called "gp96" to educate and activate a cancer patient's immune system to recognize and kill cancerous cells. Heat is conducting a Phase 2 trial of its viagenpumatucel-L (HS-110) in patients with non-small cell lung cancer, as well as a Phase 2 trial with its vesigenurtacel-L (HS-410) in patients with non-muscle invasive bladder cancer.


Forward Looking Statements

This press release includes forward-looking statements on our current expectations and projections about future events. In some cases forward-looking statements can be identified by terminology such as "may," "should," "potential," "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates," and similar expressions. These statements are based upon current beliefs, expectations and assumptions and include statements regarding the continued advances of the programs with the lead clinical trials, the expected achievement of clinical milestone, and Heat's potential for impact of Heat's ImPACT™ Therapy. These statements are subject to a number of risks and uncertainties, many of which are difficult to predict, including the ability for Heat's ImPACT™ Therapy to perform as designed, the ability to timely enroll patients and complete the clinical trial on time, the other factors described in our annual report on Form 10-K for the year ended December 31, 2014 and our other filings with the SEC. The information in this release is provided only as of the date of this release, and we undertake no obligation to update any forward-looking statements contained in this release based on new information, future events, or otherwise, except as required by law.


CONTACT:

Heat Biologics, Inc.

Investor Relations & Media Inquiries

Jeff Wolf

Michael Wood

Chief Executive Officer

LifeSci Advisors, LLC

919-240-7133

646-597-6983

investorrelations@heatbio.com

mwood@LifeSciAdvisors.com








HEAT BIOLOGICS, INC.

Consolidated Balance Sheets

Unaudited

 

 

June 30,

2015

 

December 31,

2014

 

 

 

 

 

 

 

Assets

    

 

 

 

  

 

 

 

 

 

 

Current Assets

 

 

 

 

 

Cash and cash equivalents

 

$

11,451,395

 

$

3,714,304

 

Investments, held to maturity (net)

 

 

7,912,866

 

 

10,698,982

 

Prepaid expenses and other current assets

 

 

836,088

 

 

863,227

 

Total Current Assets

 

 

20,200,349

 

 

15,276,513

 

 

 

 

 

 

 

 

 

Property and Equipment, net

 

 

494,966

 

 

445,534

 

 

 

 

 

 

 

 

 

Other Assets

 

 

 

 

 

 

 

Restricted cash

 

 

101,141

 

 

101,129

 

Deposits

 

 

69,798

 

 

19,798

 

Related party receivable

 

 

58,017

 

 

48,642

 

Deferred financing costs, net

 

 

28,050

 

 

24,554

 

Total Other Assets

 

 

257,006

 

 

194,123

 

 

 

 

 

 

 

 

 

Total Assets

 

$

20,952,321

 

$

15,916,170

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Accounts payable

 

$

814,322

 

$

1,367,426

 

Accrued expenses and other payables

 

 

1,168,259

 

 

805,968

 

Current portion of long term debt

 

 

1,009,218

 

 

397,465

 

Total Current Liabilities

 

 

2,991,799

 

 

2,570,859

 

 

 

 

 

 

 

 

 

Long Term Liabilities

 

 

 

 

 

 

 

Long term debt, net of discount and current portion

 

 

3,998,517

 

 

2,314,124

 

Other long term liabilities

 

 

12,228

 

 

—

 

Total Liabilities

 

 

7,002,544

 

 

4,884,983

 

Commitments and Contingencies

 

 

 

 

 

 

 

Stockholders' Equity

 

 

 

 

 

 

 

Common stock, $.0002 par value; 50,000,000 shares authorized, 8,404,456 and 6,492,622 shares issued and outstanding at June 30, 2015 (unaudited) and December 31, 2014, respectively

 

 

1,363

 

 

982

 

Accumulated other comprehensive loss

 

 

(37,051

)

 

—

 

Additional paid in capital

 

 

47,779,698

 

 

35,894,823

 

Accumulated deficit

 

 

(32,758,116

)

 

(24,135,447

)

Total Stockholders' Equity– Less Non-Controlling Interest

 

 

14,985,894

 

 

11,760,358

 

Non-Controlling Interest

 

 

(1,036,117

)

 

(729,171

)

Total Stockholders' Equity

 

 

13,949,777

 

 

11,031,187

 

 

 

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

20,952,321

 

$

15,916,170

 







HEAT BIOLOGICS, INC.

Consolidated Statements of Operations and Comprehensive Loss

(unaudited)


 

 

Three Months Ended,
June 30,

 

 

Six Months Ended,
June 30,

 

 

 

2015

 

2014

 

 

2015

 

2014

 

Operating expenses:

    

 

 

 

 

 

 

 

 

 

 

 

 

  

Research and development

 

$

587,240

 

$

849,359

 

 

$

1,090,791

 

$

1,382,987

 

Clinical and regulatory

 

 

3,373,758

 

 

1,113,186

 

 

 

5,543,231

 

 

1,959,570

 

General and administrative

 

 

893,242

 

 

1,014,888

 

 

 

2,202,398

 

 

2,029,758

 

Total operating expenses

 

 

4,854,240

 

 

2,977,433

 

 

 

8,836,420

 

 

5,372,315

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(4,854,240

)

 

(2,977,433

)

 

 

(8,836,420

)

 

(5,372,315

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

20,702

 

 

6,546

 

 

 

29,828

 

 

17,521

 

Other income (expense)

 

 

3,865

 

 

12,530

 

 

 

25,482

 

 

(26,529

)

Interest expense

 

 

(73,075

)

 

—

 

 

 

(148,505

)

 

—

 

Total non-operating (expenses) income

 

 

(48,508

)

 

19,076

 

 

 

(93,195

)

 

(9,008

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(4,902,748

)

 

(2,958,357

)

 

 

(8,929,615

)

 

(5,381,323

)

Net loss – non-controlling interest 

 

 

(189,277

)

 

(111,442

)

 

 

(306,946

)

 

(203,810

)

Net loss attributable to Heat Biologics, Inc.

 

$

(4,713,471

$

(2,846,915

)

 

$

(8,622,669

)

$

(5,177,513

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to Heat Biologics, Inc.—basic and diluted

 

$

(0.56

)

$

(0.44

)

 

$

(1.13

)

$

(0.80

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average number of common shares used in net loss per share attributable to common stockholders—basic and diluted

 

 

8,401,159

 

 

6,452,986

 

 

 

7,612,393

 

 

6,432,857

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

(4,902,748

)

 

(2,958,357

)

 

 

(8,929,615

)

 

(5,381,323

)

Unrealized loss on foreign currency translation

 

 

(16,185

)

 

—

 

 

 

(37,051

)

 

—

 

Total other comprehensive loss

 

 

(4,918,933

)

 

(2,958,357

)

 

 

(8,966,666

)

 

(5,381,323

)

Comprehensive loss attributable to non-controlling interest

 

 

(189,277

)

 

(111,442

)

 

 

(306,946

)

 

(203,810

)

Comprehensive loss

 

$

(4,729,656

)

$

(2,846,915

)

 

$

(8,659,720

)

$

(5,177,513

)








HEAT BIOLOGICS, INC.

Consolidated Statements of Cash Flows

(unaudited)


 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Cash Flows from Operating Activities

    

                          

    

                          

  

Net loss

 

$

(8,929,615

)

 

$

(5,381,323

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

  

 

 

 

Depreciation

 

 

53,937

 

 

 

21,068

 

Amortization of debt issuance costs

 

 

50,074

 

 

 

—

 

Amortization of bond premium

 

 

59,882

 

 

 

106,762

 

Re-measurement of fair value of stock warrants liability

 

 

—

 

 

 

20,600

 

Stock based compensation

 

 

786,847

 

 

 

497,772

 

Increase (decrease) in cash arising from changes in assets and liabilities:

 

 

 

 

 

 

 

 

Related party receivable

 

 

(9,375

)

 

 

(11,446

)

Prepaid expenses, and other current assets, and restricted cash

 

 

23,202

 

 

 

398,454

 

Deposits

 

 

(50,000

)

 

 

(10,478

)

Accounts payable

 

 

(569,974

)

 

 

68,228

 

Accrued expenses and other payables

 

 

362,523

 

 

 

(182,944

)

Other long term liabilities

 

 

12,228

 

 

 

—

 

Accrued interest

 

 

—

 

 

 

(25,364

)

Net Cash Used by Operating Activities

 

 

(8,210,271

)

 

 

(4,498,671

)

 

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

 

 

 

Proceeds from maturities of short term investments

 

 

12,967,509

 

 

 

9,631,543

 

Purchases of short term investments

 

 

(10,241,275

)

 

 

(3,305,972

)

Purchases of property and equipment

 

 

(103,369

)

 

 

(448,234

)

Net Cash Provided by Investing Activities

 

 

2,622,865

 

 

 

5,877,337

 

 

 

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

 

 

 

Proceeds from March 2015 public offering, net of underwriting discounts

 

 

11,400,870

 

 

 

—

 

Proceeds from the exercise of stock options

 

 

—

 

 

 

37,719

 

Proceeds from long term debt

 

 

2,242,575

 

 

 

—

 

Stock issuance costs

 

 

(302,461

)

 

 

—

 

Net Cash Provided by Financing Activities

 

 

13,340,984

 

 

 

37,719

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(16,487

)

 

 

—

 

 

 

 

 

 

 

 

 

 

Net Increase in Cash and Cash Equivalents

 

 

7,737,091

 

 

 

1,416,385

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents – Beginning of Period

 

 

3,714,304

 

 

 

4,566,992

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents – End of Period

 

$

11,451,395

 

 

$

5,983,377

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosure for Cash Flow Information

 

 

 

 

 

 

 

 

Interest paid

 

$

98,430

 

 

$

—

 

Cashless exercise of stock warrants

 

$

—

 

 

$

143,190